AI Silicon Partnership
Marvell Issues Warrant to Google for 59 Million Shares in Strategic AI Silicon Partnership Deal
Key Points
Marvell and Google are developing two distinct custom AI chips for Google’s TPU ecosystem: a Memory Processing Unit (MPU) to complement Google’s Tensor Processing Units, and a separate inference-optimized TPU; the MPU design is targeted for finalization by 2027 with test production to follow.
Nvidia has invested about $2 billion in Marvell, focusing on AI accelerators and interconnect technology, highlighting deeper AI collaboration beyond the Google deal.
The 2024 AWS warrant precedent involved 4.18 million Marvell shares at an exercise price of $87.7706, with roughly 3.9 million of those shares vesting based on revenue generated through January 2030, illustrating a pattern of equity-linked incentives with hyperscalers.
Google’s broader supplier landscape includes a Broadcom arrangement for TPU and networking components extended through 2031, signaling a multi-vendor strategy for its custom silicon stack.
Marvell’s stock rose about 12% in premarket trading following the Google deal announcement, reflecting market optimism about the strategic partnership and potential revenue from the warrants.
Marvell Technology has issued a warrant giving Google the right to buy up to 58,970,907 Marvell shares at $206.58 each — a stake worth roughly $12.18 billion — as part of a new custom chip deal, according to Investing.com. Marvell shares jumped nearly 11% in premarket trading after the announcement.
The two companies will work together to develop custom AI chips for Google's TPU ecosystem, including an AI inference accelerator and a Memory Processing Unit (MPU) designed to complement Google's Tensor Processing Units, TipRanks reported. The warrant is exercisable until August 18, 2033.
How the Warrant Works and What Google Gets
Under the deal, 1,360,867 shares vest in the first year automatically. The remaining shares vest in tranches tied to Google spending $500 million in revenue with Marvell through 2033, according to Investing.com. Google can only transfer the warrant to its own controlled affiliates, and standard securities-law rules apply.
In exchange, Marvell gets a locked-in hyperscaler customer with guaranteed development milestones. The MPU chip design is targeted for finalization by 2027, with test production to follow after that, MarketScreener noted.
Marvell's Pattern of Equity Deals With Cloud Giants
This is not the first time Marvell has used a warrant to lock in a major cloud customer. In 2024, Marvell struck a similar deal with Amazon Web Services. That warrant covered 4.18 million shares at $87.77 per share, with roughly 3.9 million shares vesting based on AWS revenue generated through January 2030, according to KFGO.
The Google deal is far larger in scale — more than 14 times as many shares at more than twice the price. The strategy is clear: give cloud giants equity upside in exchange for long-term chip development commitments.
Google's Multi-Vendor Silicon Strategy Includes Broadcom
Google is not putting all its chips in one basket. The search giant also has an existing arrangement with Broadcom for TPU and networking components, extended through 2031. That deal signals Google's preference for a multi-vendor approach to its custom silicon stack, MarketScreener reported.
Nvidia has also invested about $2 billion in Marvell, focused on AI accelerators and interconnect technology. That investment deepens Marvell's role across the AI chip supply chain well beyond the Google deal alone.
Market Reacts as Marvell Cements AI Chip Role
Marvell stock rose about 12% in premarket trading after the deal was announced, according to Investing.com. Analysts see the partnership as a major signal that Marvell is becoming a go-to design-services partner for hyperscalers building custom AI silicon.
The revenue-linked vesting structure means Marvell's equity exposure to Google grows only as Google actually spends money on its chips. If Google hits the full spending targets, the warrant could be worth billions — a major incentive for both sides to make the partnership work, TipRanks noted.
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